Global insurance majors eyeing Indian market

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New Delhi, April 7: Global insurance giants like Aegon and Axa have evinced interest in entering the domestic market. It is learnt that the two companies would soon start scouting for Indian partners.

Notably, no new foreign insurance company has come into the Indian market in the last two years. Industry sources said that ambiguity in insurance policies primarily relating to the foreign direct investment has proved tobe a big dampener.

Aegon and Axa, which have presence both in the field of insurance and pensions, are among the top insurance players across the globe. Axa is into both life and non-life categories.

"There is no clarity in the government policies. Many companies, despite being interested in entering the domestic market have not taken the move due to the ambiguous policies," the source said. He added that the foreign partners would exercise more managerial powers with the increase in FDI limit. It is understood that a number of other insurance majors are also waiting in the wings to make a foray into the Indian market.

Industry watchers observe that it would be a tall task for the UPA government to raise the FDI limit to 49% from the current 26%, though a couple of days back, finance minister P Chidambaram reassured that the limit would be increased.

Mr Chidambaram, while presenting the Budget for 2004-05, had proposed to increase the FDI limit to 49%. However, the Left parties are vehemently opposed to the proposal of hiking the FDI limit.

Meanwhile, the government is looking at a proposal to come up with an omnibus act. The government intends to delink the FDI norms from the Insurance Act, once it is amended.